Matt Jones, I believe that this shoot cannot be saved. I associate the discoloration with overwatering and /or inadequate root mass. Perhaps Mr. Subjunctive can confirm this; (s) he made the observation first on D. marginata. I had the opportunity to follow up and found it to be a terminal symptom on the 'Janet Craig' also. After a number of 'post mortems' I came to the conclusion that poor root growth was a contributing factor. Occasionally a specimen (3-stalk) corn plant would fall over and had to be repotted. I was quite disappointed to find that only one or two roots ('strands' is my best description) from each stalk. And it was not unusual to find one stalk with no roots at all! This meant that one had to water very, very sparingly and let the plant show that it needs water. Specimens grown in 'Hawaiian lava rock' were easier to water. Incidentally, these plants taught me to use a soil probe - always! - before deciding to water or not. I like the metal probe with its regularly-spaced niches for trapping a sample of the soil at the various depths. It is easy to keep it sterile. I cut similar notches in a wooden dowel but it never served me well enough.

So, I would cleanly remove the stalk and examine the cross section of the 'stump' carefully to determine the extent of the infection into the main stem. If there is any doubt at all, saw off the infected section down to clean, healthy tissue and put the plant in a brightly lit area. Hold off on watering. Stressing the stalk in this way induces latent buds to emerge.

Of course, there may be a healthy shoot or two remaining at the top of the stalk. That being so, manage the watering - skillfully!

When using peaty potting soils, stories like Rona's are so common. Using a more chunky/porous/airy soil can make things so much easier, alleviating most of the risk of rotting roots, unless you're very seriously dedicated to drenching a plant constantly.

http://forums2.gardenweb.com/discussions/1490818/good-growing-practices-an-overview-for

It could be a root issue, but also looks like the cold damage I let one plant get a few years ago. It's fine now. No idea if your plant has been in too-cold temps.

More info would lead to more specific feedback, and more pics from other angles and of the whole plant including the pot.

Dracaenas are also sensitive to various chemicals that are sometimes in water that can't evaporate if water sits (like fluoride and lime, and non-volatile forms of chlorination,) so giving rain, distilled, or condensate from a dehumidifier or A/C can help keep them as healthy as possible when in pots.